Introduction to Corporate Finance

Ross et al.: Fundamentals

of Corporate Finance, Sixth

Edition, Alternate Edition

V. Risk and Return 12. Some Lessons from

Capital Market History

© The McGraw−Hill^419

Companies, 2002

390 PART FIVE Risk and Return

FIGURE 12.5

 60

1925 1935 1945 1955 1965 1975 1985 1995 2000

Year-End

Total Annual Returns (in percent)

60

40

20

0

 20

 40

Source: ©Stocks, Bonds, Bills, and Inflation 2001 Yearbook™, Ibbotson Associates, Inc., Chicago (annually updates

work by Roger G. Ibbotson and Rex A. Sinquefield). All rights reserved.

Year-to-Year Total Returns on Common Stocks: 1926–2000

FIGURE 12.6

 100

1925 1935 1945 1955 1965 1975 1985 1995 2000

YEd

Total Annual Returns (in percent)

150

100

50

0

 50

Source: ©Stocks, Bonds, Bills, and Inflation 2001 Yearbook™, Ibbotson Associates, Inc., Chicago (annually updates

work by Roger G. Ibbotson and Rex A. Sinquefield). All rights reserved.

Year-to-Year Total Returns on Small-Company Stocks: 1926–2000